Greater openness

"The increasingly open, fair, predictable and favorable business environment, protected by legislation, will definitely help us develop with lower costs and greater efficiency," said Stephane Rinderknech, CEO for China of L'Oreal Group of France.

He said the enhanced protection offered by the new law will help his company reinforce its focus on research and innovation, manufacturing quality, consumer services, development of local talent, sustainability, and the acceleration of product launches to make a bigger contribution to Chinese consumers and the local market.

Wei Jianguo, vice-president of the China Center for International Economic Exchanges, said that compared with the three existing laws that focus on the supervision of foreign companies, the draft law emphasizes protection of overseas investors.

"The law is expected to serve as an innovative improvement of China's foreign investment legal system," he said. "The move shows that China is promoting opening-up based on rules and related institutions, in addition to opening-up based on the flow of goods and production factors."

Ministry of Commerce data show that in the past 40 years, FDI in China has surpassed $2 trillion, contributed to the creation of 10 percent of urban jobs, and accounted for 20 percent of fiscal revenue and almost half the nation's foreign trade.

Andrew Weir, vice-chairman of KPMG China, said greater clarity of the laws relating to foreign investment is always helpful. The adoption of the draft law will bring more certainty and also help with the structuring of investments that form part of initial public offerings and capital market transactions.

"Opening up the economy is good for business," he said, adding that a sound business environment will guarantee improved investment, creativity and productivity.

Shen Kaiju, a professor of commercial law and a member of the 13th National Committee of the Chinese People's Political Consultative Conference, said that when the three existing laws were formulated, global investment came to China mainly because of the low cost of manufacturing materials and human resources.

"Now, boosted by consumption upgrades, rich talent resources and modern industrial and infrastructure facilities, China's huge market potential is much more alluring for foreign investment," Shen said. "Therefore, multinationals are keen to see the government update the existing laws and provide greater market access in the country."

Zhang Yuyan, director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences and a CPPCC National Committee member, said, "A better business environment requires better implementation of policies and law enforcement."

Yan Bin, co-chair of the Belt and Road General Chamber of Commerce (Hong Kong) and a member of the CPPCC National Committee, said, "We hope to see streamlined procedures and minimized human intervention, promoting an open, transparent environment for both Chinese and foreign businesses, as well as seeing more concrete guidelines in addition to the official online releases."

Jens Hildebrandt, executive director of the German Chamber of Commerce in China (North China), said German companies in the country welcome and appreciate the government's efforts to reform the rules governing foreign investment.

He said the next step the chamber would like to see is the timely elaboration of detailed regulations for implementation to strengthen foreign investors' trust, create confidence and provide greater legal certainty.

"We hope for a wise and appropriate approach to this matter, and would be pleased to contribute to the formulation of the regulations for implementation," he added.